Showing posts with label BHR-BHRPRD. Show all posts
Showing posts with label BHR-BHRPRD. Show all posts

Wednesday, July 24, 2019

Observations and Sample of Recent Trades: BHRPRD, KR

Economy: 

 US existing home sales June 2019: Down 1.7% (consensus estimate was -.2%)

Trump's tariffs trip up the all-American RV industry - Reuters (RV shipments to dealers have declined 22% this year, compared to 2018, over the first five months. Shipments were down 4% last year. The industry has been hit by cost increases caused by Trump's tariffs on aluminum and steel as well as "other duties on scores of Chinese-made RV parts, from plumbing fixtures to electronic components to vinyl seat covers.")  

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 This is an incredible cover of Led Zeppelin's Stairway to Heaven: Heart (Ann Wilson vocals) - Stairway to Heaven (Live at Kennedy Center Honors Led Zeppelin) [FULL VERSION] - YouTube

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 Issuer Redemption Notices: 

 Since my last post, I received notice that the REIT Ventas (VTR) will redeem its 2.7% SU maturing on 4/1/20 on 8/19/19. I own 6 bonds with 3 of them owned in my Fidelity taxable account: 


There will be a small make whole payment of $16.8 for the six bonds, plus accrued interest, in addition to the $6K in principal amount. 

 Goldman Sacks will redeem on 7/29/19 its 2.75% SU maturing on 5/29/20. I own 1 bond. 
I recently bought that bond (4/30/19). Item # 3.E.

 I am making my reinvestment problem worse by selling intermediate term corporate bonds, but I would prefer realizing the gains now rather than receiving the relatively low interest payments. 

 I am trading intermediate term corporate bonds aggressively. 

 Hopefully, there will be another interest rate spike next year where I can buy the bonds back closer to their respective maturities and at lower prices than my previous purchases.      

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 Portfolio Management: 

 I am going to redirect the proceeds from some maturing securities into dividend growth stocks. I will be limiting my selection to stocks with starting yields over 3% that have already been beaten up. Kroger and Kellogg are in this category. 

 This article lists several stocks in that category: These dividend stocks haven’t been scooped up by investors yet-MarketWatch {I am not chomping at the bit to buy Macy's, Macerich Co., and Simon Property Group Inc, three  of the stocks mentioned in that article. Macerich and Simon Property are mall REITs. Newell Brands Inc. is on my watch list, but its turnaround is too iffy and its debt load is worrisome.}

 I am exercising some judgment that the stock declines have probably been overdone to the downside; or at least the recent declines in prices squeezes out much of the downside risks.  

 I will not buy a full position in one trade and will reserve an option to average down. If I average down, I will consider selling the higher cost lot when I can do so profitably.  

 Stocks like Kroger and Kellogg are clearly out-of-favor and may remain so for an unknowable period of time. 

 For these kind of stocks, victory is defined as a realized annualized total return in excess of 7%.  

 CD yields have both fallen and flattened out along the yield curve: 
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Trump: 

 The Nobel Peace Prize Winner Nadia Murad told Donald that ISIS had killed her family. The Duck then asked her "Where are they now".  A Yazidi woman from Iraq told Trump that ISIS killed her family. ‘Where are they now?’ he asked. - The Washington Post

 Donald is not a good listener, which is usually the case for those who have the narcissistic personality disorder. Narcissistic personality disorder - Symptoms and causes-Mayo Clinic (Donald check's all of the boxes for that mental illness) He enjoys listening to himself pontificate on an endless variety of subjects where his ignorance radiates blindingly bright, easily visible to those who are not blind.   

 It looks like Trump's DOJ has placed a muzzle on Mueller's testimony. DOJ tells Robert Mueller 'any testimony must remain in the boundaries of your public report' I will not be watching his testimony today. 
Facts straight from Mueller’s mouth? They won’t put out the gaslighting fire - The Washington Post ("Gaslighting explains why fact-checking generally doesn’t work. And if the truth contradicts people’s favored leaders, hearing it might even push some voters to harden their opposition to it. Trying to contain gaslighting with the truth is like fighting a wildfire with surgical forceps.") 

 The author believes that it is possible to penetrate the  Trumpster's Alternate Reality with facts. I view it as futile and a waste of time.   

Trump is a gaslighter and has mastered the art for the tens of millions who are susceptible to manipulation by this demagogue. 

 Trump: “Stick with us. Don't believe the crap you see from these people, the fake news . . . What you’re seeing and what you’re reading is not what’s happening.”  Translation: Ignore facts and believe whatever the Duck says. 

'Send her back!' chant shows Trump's ugly plan to get reelected The Trumpsters new chant of "Send her back" refers to Ilhan Abdullahi Omar who was born in Somalia and became a U.S. citizen in 2000 when she was 17. Melania Trump claims to have become a citizen in 2006.  

My idea is to send all of the Trumps back to Germany.  

 Maybe we can allow Donald to come back when and if he can pass the citizenship test. Some Trump opponents may complain about such leniency. I view it as unlikely that Donald could ever pass a citizenship test since reality creations about American history are not viewed as correct answers by the test graders. 

 Most of us would fail the U.S. citizenship test, survey finds

 The Extremely Stable Genius sees a difference behind the Trumpster's chant "send her back" and his tweet "go back". Trump says he disagrees with ‘send her back’ chant directed at Rep. Omar during his rally despite his previous ‘go back’ tweet Both are clearly racist comments and are recognized as such by most people, excluding the Trumpsters of course.  

Donald was really not concerned about anyone viewing his "go back" comments as racist since "many people agree." Trump on racist tweets: “It doesn’t concern me because many people agree” - Vox He is right about that claim. A poll showed that a majority of republicans agreed with him. Most Republicans agree with Trump’s ‘go back’ to your country tweets, polls show - MarketWatch   

 How a racist tweet became a Trump rally chant in three short days - The Washington Post

 Trump calls rally crowd ‘incredible patriots,’ a day after trying to distance himself from ‘Send her back!’ - The Washington Post

40% of Americans agree with Trump's "go back" to their countries tweet: Most Americans disagree with Trump's "go back" tweets — CBS News poll - CBS News; NBC News poll of the South: Voters' support for Trump grows 

 Illinois GOP group removes post calling congresswomen ‘Jihad Squad’  

Gretna police officers Charlie Rispoli and Angelo Varisco fired for suggesting Alexandria Ocasio-Cortez "needs a round" after reading fake news post on Facebook - CBS News It is hard for me to determine whether the Russians or the Trumpsters are the primary spreaders of fake news in the U.S.

 Here's the British bigot who Trump retweets-CNN

Their ancestors were slain a century ago along the US-Mexico border by Texas Rangers. They say now is the time to retell the horror - CNN There are two Americas. I am not talking about blue and red states here.  

 Opinion | Donald Trump Hates America - The New York Times (opinion column written by the centrist David Brooks)

 Thanks to Demagogue Don and other reality creators, a recent poll found that 1/3rd of Americans still believe Obama was probably born in Kenya.  

 Fact-checking Trump’s misleading attacks on Omar, Ocasio-Cortez in North Carolina | PolitiFact; 

 Trump's False Claims About Rep. Ilhan Omar - FactCheck.org Facts do not matter to Trump and his True Believers and never will.  

 Trump and Stephen Miller falsely claimed that Alexandria Ocasio-Cortez called the U.S. garbage when she clearly said that some policies were garbage in her opinion. Fox News Defends AOC and Uses Trump Tweet To Destroy Stephen Miller

 There can be reasoned and good faith criticisms of policy proposals made by Democrats without resorting to knowingly false characterizations of their statements. The Trumpsters are just more easily swayed and incensed by the false narratives created by Trump and his minions than by good faith and factually based discussions of policy which bores them.  

 The Extremely Stable Genius claimed that he could win the Afghan war in 1 week, but has so far refrained from implementing his victory plan since it would require killing 10 million people. Trump: I could win Afghanistan war 'in a week'-POLITICO; Afghanistan asks for explanation after Trump claims US could wipe it 'off the face of the Earth' 

 Perhaps those 10 million people need to profusely express their gratitude that the Duck is such a humanitarian, as proven by his life's work of good deeds and charitable contributions prior to becoming President and his never failing attendance at church services. 

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 1. Bought 50 KR at $21.16-Used Commission Free Trade:

This purchase, like the Kellogg one discussed in the prior post, is best described as thoroughly contrarian. The problems are well known but are probably overblown IMO based on the $21.16 price. 

 On the day of my purchase (7/22/19), the stock made a new 52 week low. 

 The stock is in falling knife mode. 

 I will consider buying another 50 shares at below $20. 

 Closing Price Yesterday: KR $20.82 -$0.04 -0.19% (a new 52 week low of $20.7 was hit intra-day)

 Quote: Kroger Co.  (KR)
P/E On Next F/Y Year's EPS Consensus estimate of $2.31 = 9.01 (at $20.82 closing price 7/23) 
Sourced as of 7/23/19: KR | Kroger Co. Analyst Estimates | MarketWatch

 Overview – The Kroger Co.
KR SEC Filings
KR 10-Q for the Q/E 3/25/19
Annual Report for the F/Y Ending on 2/2/19

 Dividends: Quarterly at $.16, raised from $.14 effective for the 2019 3rd quarter ($.64 annually)

 Dividends – The Kroger Co.

 Kroger Board of Directors Raises Quarterly Dividend by 14%

 The quarterly rate was at $.045 per share 10 years ago.

 Next Ex Dividend Date: 8/14/19

 Dividend Yield at $21.16= 3.03%

 KR 5 Year Chart as of day of purchase (7/22/19): Ugly

Maybe my mind has turned to mush since I actually find that chart appealing for a first time purchase.

 Analyst Reports:

 Argus (3/2019): Buy with a $30 price target reduced from $35

 Morningstar (6/20/19): 4 stars with a FV at $28.5 

S & P (6/20/19): 4 stars with a $27 price target

 Credit Suisse (6/20/19): Outperform with a $27 PT reduced from $30

 All of those reports are available to Schwab customers.

 Recent Earnings Report: Kroger Reports First Quarter 2019 Results (released on 6/20/19)

 GAAP E.P.S. = $.95
Non-GAAP E.P.S. = $.72
Ex Fuel Same Store Sales: 1.5%
Digital Sales: = +42%
Net Debt to Adjusted EBITDA = 2.54

 The GAAP number is higher due to a $57M real estate gain.

 The market and analysts generally responded unfavorably to this report. 

 The Credit Suisse analyst reduced the PT to $27 from $30 in response, calling the report "uninspiring" and doing "little to derail the bear and (far more unpopular) bull theses". One can only glance at the stock chart and conclude that the bear thesis is the popular one.

 A central part of the bear thesis is competition originating from Amazon's acquisition of Whole Foods, the grocery departments at Walmart and Target, and other grocery retailers.

 The negativity is IMO generated by accentuating the negative and downplaying the positive.

 The CS analyst emphasized, for example, that identical store sales increased by 1.5% compared to the consensus 1.7% which was regarded as material by that analyst. That analyst acknowledged that the non-GAAP E.P.S. beat the consensus estimate by 1 cent.

 One positive is Kroger's growing private label brands. The company added 219 new private label brands during the quarter that will generated $225M in incremental sales during the quarter. Private label brand sales increased overall by 3.3%. Kroger's private brands generated about 30.5% of its total unit sales in F/Y 2018.

 Kroger has now implemented digital ordering and curbside pickup in all of its 2750 stores.

 The natural and organic store brand Simple Truth hit $2.3B in revenues in F/Y 18. Argus notes that Simple Truth was now the largest natural and organic brand by volume.

 Argus also points out that KR has increased its dividend at a compound annual rate of 11.5% over the past 5 years.

 2019 Guidance as of 6/20/19:

 Other Material News:

 Kroger Completes Sale of Turkey Hill Business to Peak Rock Capital Affiliate (4/29/19)(sold for $215M and will use proceeds to reduce debt)

Kroger Completes Sale of Convenience Store Business to EG Group (4/20/18)(after tax proceeds of $1.7B of which $1.2B was used for an accelerated share repurchase program)

 Senior Unsecured Bonds: Rated Baa1/BBB

 I have been trading KR's senior unsecured debt and have recently eliminated all of my KR intermediate term bonds. Those sales were not motivated by concerns about credit risk. I have substantially pared my intermediate corporate bond exposure by selling into a strong bond rally.

 Those bonds were sold with the anticipation of buying them back during the next interest rate spike. 

I currently own the following KR SU bonds: $4K par value

 2 KR 1.5% SU Maturing on 9/30/19
2 KR 3.3% SU Maturing on 1/15/21

2. Intermediate Term Bond Ladder Basket Strategy: 

A. Sold 1 GATX 3.25% SU Maturing on 9/15/26: 


Profit Snapshot: $53.55


Finra Page: Bond Detail

As shown in the FINRA price chart, this bond closed at 89.7 on 11/30/18. I bought this bond in March 2019. The decline in this bond's price reflected in that chart was not due to increased credit risks but to a rise in interest rates late last year. 

Issuer: GATX Corp. 

Sold at 99.227
YTM at 99.227 = 3.371%
Proceeds at 99.127 (after $1 commission)

I previously sold this bond at 97.543: Item # 4.C. (12/26/17 Post) The YTM then was 3.579%. 

In this account, I have 2 GATX 2.5% SU bonds that mature on 7/30/19.

 B. Sold 1 GATX 3.25% SU Maturing on 3/30/25: 

Profit Snapshot: +$18.75

Item # 1.E. Bought 1 GATX 2023 SU at a Total Cost of  97.095 (3/13/17 Post)

 History: 
FINRA Page: Bond Detail

 Sold at 99.919
YTM at 99.919 = 3.265%
Proceeds at 99.719 (after $2 brokerage commission)

3. Eliminations:

 A. Sold 50 BHRPRD at $25.25:

Quote: Braemar Hotels & Resorts Inc. 8.25% Preferred Series D Stock
Issuer: Braemar Hotels & Resorts Inc. (BHR) (externally managed-major negative in this case)

 Profit Snapshot: +$251.44

Item # 1.A. Bought 50 BHRPRD at $20.02 (1/20/19 Post)

 Security Description:

 Prospectus 

Par Value= $25
Classification: Equity Preferred Stock
Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
Capital Structure Placement: Senior only to common stock
Stopper Clause: Yes
Dividend: Quarterly, Cumulative and Non-Qualified
Issuer Optional Call: On or after 11/20/23

 Last Ex Dividend: 6/27/19 (received, see snapshot above)

 4. Short Term Bond/CD Ladder Basket Strategy: 

 A. Bought 9 Treasury 28 Day Bills Maturing on 8/20/19: 
IR = 2.128% 

This purchase flushes out the recently received proceeds from maturing short term securities. The purchases of one month treasury bills at auctions only briefly postpones my Day of Reckoning relating to reinvestment options.   

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members. 
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Sunday, January 20, 2019

Observations and Sample of Recent Trades: APLE, BHK, BHRPRD, GNL, NBB, NWH.UN:CA

Economy: 

 SPX cleared the 2,632 hurdle with gusto last Thursday and Friday. 

 Better than expected earnings from large financial institutions set a more positive tone prior to Friday when there was a news report that China had made a substantive offer to reduce its trade imbalance: China Offers a Path to Eliminate US Trade Imbalance: Sources - Bloomberg  

 China has been offering throughout the negotiations to increase its purchases. The difference in this latest offer appears to be a promise to eliminate the trade imbalance altogether by 2024. If that proposal was in fact made, the question then becomes how to enforce it.     

There is a lot of hand wringing about the FED reducing its excessively bloated balance sheet by $50B per month. The bond market is not concerned as the new supply has been absorbed and intermediate and longer term interest rates have come down and remain benign for the real economy. 

Quantitative easing lowered interest rates. Why isn’t quantitative tightening lifting them more? Short term rates have gone up due to the FED raising the FF rate from zero to the current 2.25 to 2.5% over the time period reflected in the preceding chart. 

 December home sales and price report for California (existing single family home sales declined 2.4% from November and were down 11.6% Y-O-Y) The statewide median home price was $557,600 in December. When median family households can not afford a median price home, the remedy is for prices to decline).  

 In my area, this is what you can buy by hitting the ask price, for $589K: 4 Bedrooms, 3 Baths, 3150 square feet, $3,192 property tax in 2017 The actual negotiated price would be lower. 

 Here is one listed for $415K: 6601 N Creekwood Dr, Brentwood, TN 37027 

 The bonds issued by the City of Brentwood  and Tennessee have AAA credit ratings. 

 Brentwood is located in Williamson County which also has a AAA credit rating as does the county seat Franklin, Tn. 

 So it is possible to have low property taxes and the highest credit ratings possible.  

 This is a picture of the clan's home near Nunnelly Tennessee in 1900 which would be cheaper if it was still standing:
I am not sure whether the house fell or burned down. My grandfather is second from left and the clan's first stock investor is far left. Fortunately, my grandfather elected to leave Nunnelly during the Great Depression and move the tribe to Nashville based in large part on a realization that 100 years in that area had not led to prosperity. 
  
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F.B.I. Opened Inquiry Into Whether Trump Was Secretly Working on Behalf of Russia; Trump Laces Into F.B.I. Over Inquiry Into Whether He Aided Russia, making a series of false claims-The New York Times

 Revelations about Manafort’s 2016 interactions with Russian associate show special counsel’s intense focus on Russia contacts - The Washington Post

 Trump’s Efforts to Hide Details of Putin Talks May Set Up Fight With Congress - The New York Times; 

 Trump has concealed details of his face-to-face encounters with Putin from senior officials in administration - The Washington Post

 Sanders Described FBI Probe Critics as Losers Just another hypocrite. 

Here are 18 reasons Trump could be a Russian asset - The Washington Post (opinion article by former republican Max Boot)

 Trump administration calling nearly 50,000 back to work, unpaid, as shutdown drags on - The Washington Post

 McConnell (R) blocks bill to reopen most of government

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A. Bought 50 BHRPRD at $20.02: 

Quote: Braemar Hotels & Resorts Inc. 8.25% Preferred Series D Stock

 Closing Price Last Friday: BHR-PD $23.74 +$0.36 +1.55% 

 Issuer:  Braemar Hotels & Resorts Inc. (BHR)

Website: Real Estate Investment Trust specializing in full service luxury hotels and resorts 

 Portfolio Map: Braemar Hotels & Resorts Properties 

 SEC Filings

 Management: External

 BHRPRD is a recently issued equity preferred stock that had slid 16.5% from the $25 IPO price when I made this purchase. The IPO was in mid-November. Braemar Hotels & Resorts Prices Public Offering Of Preferred Stock  

 Last Ex Dividend Date: 12/28/18 (shortly after purchase on 12/21/18)

 This was the first dividend payment but will be a pro-rata for the number of days this stock was outstanding in the last quarter. The pro rate amount was $0.234896 per share. Press Release

 Dividend Yield at a TC of $20.02 = 10.3%

 Current and Maximum Position: 50 shares (viewed as risky) 

Description of Preferred Stock

 Prospectus 

 Par Value= $25
Classification: Equity Preferred Stock
Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
Capital Structure Placement: Senior only to common stock
Stopper Clause: Yes
Dividend: Quarterly, Cumulative and Non-Qualified
Issuer Optional Call: On or after 11/20/23

Last Earnings Report: Q/E 9/30/18

 Braemar Hotels & Resorts Reports Third Quarter 2018 Results
10-Q for the Q/E 9/30/18 

 SEC Filed Investor Presentation

 10-Q for the Q/E 9/30/18 (debt discussed at pages 19-20-mortgage loans priced at spreads to Libor)  

Recent News: 

Braemar Announces Closing Of The Ritz-Carlton Lake Tahoe Acquisition Utilizing An Enhanced Return Funding Program With Ashford Inc.

 Tentative Trading Plan: Given the price paid for the shares and the yield, I am inclined to hold onto this lot until I become more concerned about credit and interest rate risks.  

B. Bought 100 NWH.UN:CA at C$9.67  (IB C$1 commission): 


Quote: Northwest Healthcare Properties Real Estate Investment Trust (Canada: Toronto)

 Closing Price Last Friday: NWH-UN.TO C$10.54 +C$0.07 +0.67% 

 U.S. Grey Market: NWHUF 

 Website: NorthWest Healthcare Properties

 "The REIT provides investors with access to a portfolio of high quality international healthcare real estate infrastructure comprised of interests in a diversified portfolio of 153 income-producing properties and 10.8 million square feet of gross leasable area located throughout major markets in Canada, Brazil, Europe, Australia and New Zealand. The REIT's portfolio of medical office buildings, clinics, and hospitals is characterized by long term indexed leases and stable occupancies." 

 Property Map

 Dividend (more appropriately called "distributions"): Monthly at C$.06667 per unit or C$.8 annually)

 Distributions are normally made mid-month with the ex distribution date late in the prior month.  

 Last Earnings Report: Q/E 9/30/18

NorthWest Healthcare Properties Real Estate Investment Trust Releases Strong Third Quarter 2018 Results and Continued Execution on Strategic Priorities

 Financial Information for the Quarter:
NorthWest Healthcare Properties REIT Announces Successful Completion of $125 Million Offering of Convertible Debentures (12/20/18)

 Average Total Cost Per Share: C$10.03

 Dividend Yield at Total Cost: 7.98%

Current Position: 500 units 

Maximum Position: 1000 units

Purchase Restriction: None 

 Last Buy Discussion: Item #1.A (3/12/18 Post);

 Last Sell Discussion: Item # 1.B. Sold 100 NWHUF at US$8.79  (8/21/17 Post)

 Realized Gains to Date: U.S.$713.29

 When buying and selling shares priced in CADs, the IRS does not want the broker to report gains and losses in Canadian dollars or the value of the dividends either. So all of those values have to be converted into USDs for tax reporting purposes. To accomplish that task, a USD value has to be established for every share when purchased or sold. The broker does that computation. For a buyer of NWHUF, which is the same ordinary share but priced in USDs, the conversion is not necessary since the prices were never in CADs. 

 The largest gain was on a 1000 share lot: Item # 1. A. Sold 1000 at C$10.68 (/7/31/17)(profit snapshot = US$606.31)

 I would emphasize again that "distributions" paid by Canadian REITs, which are not taxed as income in Canada, will be taxed when paid into a U.S. citizens retirement account in contrast to dividends paid by Canadian corporations whose income is taxed at the corporate level. Since a tax withheld from a dividend payment made into a U.S. retirement account is not recoverable as a credit or deduction, I would never own a Canadian REIT in my Roth IRA. I have been able to recover foreign dividend taxes as credits off my federal income taxes when those payments are made into a taxable account.  

 C. Added 10 GNL at $17.28-Used Commission Free Trade: 

Quote: Global Net Lease (GNL)

 Closing Price Last Friday: GNL $20.21 -$0.21 -1.03% 

 Last Discussed: Item # 1.B. (12/19/18 Post) I have nothing substantively to add to that recent post. I discussed the last earnings report in that post:  

 Website: Global Net Lease

 GNL SEC Filings; 2017 Annual Report

 Dividend: Monthly at $.1775 per share  ($2.13 annually)

 Global Net Lease, Inc. (GNL) Dividend Date & History - Nasdaq

 Last Ex Dividend Date: 1/14/19 (all shares participated) 

 Average Total Cost Per Share = $19.63

 Dividend Yield at Average Total Cost = 10.85%

 Dividend Reinvestment: Yes starting with the last monthly dividend payment

 Current Position: 70+ shares

 I may elect to sell the highest cost 50 share lot (bought at $20.13) and restart a buying program at less than than $17.28. I am in no hurry to sell that 50 shares and may wait until the price approaches or exceeds $21. 

 Maximum Position: 150 shares 

 Purchase Restriction: Small Ball Rule 

 Last Earnings Report: Global Net Lease Announces Operating Results For Third Quarter 2018

 D. Bought 10 APLE at $13.88-Used Commission Free Trade: 

Quote: Apple Hospitality REIT Inc. (APLE)

 Closing Price Last Friday: APLE $15.77 +$0.05 +0.32% 

 Website: Apple Hospitality REIT
Hotel Map: Hotel Map
APLE SEC Filings

 "Apple Hospitality REIT, Inc. (NYSE: APLE) owns one of the largest portfolios of upscale, select-service hotels in the United States. Our national, geographically diverse portfolio consists of 241 Hilton and Marriott branded hotels located across 34 states, serving some of the country’s top markets for business and leisure travelers." Corporate Overview - Apple Hospitality REIT

Last Substantive Discussion: Item # 1.B. (12/5/18 Post) I discussed the third quarter earnings report in that post and have nothing to add to that discussion. 

 Last Earnings Report: Apple Hospitality REIT Reports Results of Operations for Third Quarter 2018

 Dividend: Monthly at $.1 per share

 Last Ex Dividend Date:  12/31/18

 Apple Hospitality REIT, Inc. (APLE) Dividend Date & History - Nasdaq

 Dividend Reinvestment: Yes. 

 Average Cost Per Share: $17.18

 Dividend Yield at Average Total Cost: 6.98%

 APLE 1 Year Chart: Bear Trend Starting in January 2018 

 Maximum Position This Account: 120 shares + Shares purchased with dividends (10 shares left)

 Current Position This Account: 116+

 Trading Restriction: Small Ball Rule 

 Sell Discussions: 

 Item # 5.A. Sold 50 APLE at $19.6 (12/18/17 Post)

 Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)

 Item 2.B.  Sold 100 APLE at $19.43(5/25/17 Post)

2. Short Term Bond/CD Ladder Basket Strategy: 

 Purchases = $5K

A.  Bought 1 Southern Co 2.15% SU Bond Maturing on 9/1/19: 

I now own 3 bonds.  

 FINRA Page: Bond Detail (prospectus linked)

 Issuer: Southern Co.  (SO)
Southern Company reports third-quarter 2018 earnings

 SO Analyst Estimates
SEC Filings
2017 Annual Report

 Credit Ratings: 

Fitch Rates Southern Company's Floating Rate Senior Notes 'BBB+'; Ratings on Negative Watch (8/15/18)

 Bought at a Total Cost of 99.45
YTM at TC Then at 3.019%
Current Yield at TC = 2.1619%

B. Bought 1 Dominion Gas 2.5% SU Bond Maturing on 12/15/19: 

I now own 2 bonds. 

 FINRA Page: FINRA Page: Bond Detail (prospectus linked)

 Issuer: Wholly owned subsidiary of Dominion Energy Inc. (D)
D Analyst Estimates
Dominion Energy SEC Filings
10-Q for the Q/E 9/30/18

 10-K Dominion Energy 2017 Annual Report (Dominion Gas is consolidated with Dominion Energy but the annual report does break out its results separately in the Annual Report starting at page 84) 

 The credit ratings for Dominion Energy Gas are higher than the holding company Dominion Energy. That is also the case with Virginia Electric Power.

Credit Ratings: 


Fitch Affirms Dominion Energy and Subsidiaries; Outlook Stable (10/5/18)(Dominion Gas reaffirmed at A-, higher than its parent's rating of BBB+) 

 Bought at a Total Cost of 99.52
YTM at TC Then at 3.026%
Current Yield at TC = 2.5121%  

C. Bought 1 BP Capital 2.315% SU Maturing on 2/13/20: 

FINRA Page: Bond Detail (prospectus linked)

 Issuer: Wholly owned subsidiary of BP PLC who guarantees the notes 
BP Analyst Estimates - BP PLC ADR

 Credit Ratings: 

 Moody's changes BP's outlook to stable, affirms A1 ratings - Moody's (10/8/18)
Fitch Affirms BP at 'A'; Outlook Stable (5/24/18)

 Bought at a Total Cost of 99.252
YTM at TC then at 3.017%
Current Yield at TC = 2.333%

 At the time of purchase, I could have bought one 1.375% treasury maturing  on 2/15/20 at a 2.584% YTM and a 1.39% current yield: 

D. Bought 2 Smucker 2.5% SU Maturing on 3/15/20:

FINRA Page: Bond Detail (prospectus not linked)

 Prospectus

 Issuer: J.M. Smucker Co. (SJM)
SJM Analyst Estimates

 The J. M. Smucker Company Announces Fiscal 2019 Second Quarter Results

 The J. M. Smucker Company Completes the Divestiture of its U.S. Baking Business (SJM sold for $370M its U.S. brands Martha White, Pillsbury, Hungry Jack, White Lilly and Jim Dandy)

 Smucker Brands - The J.M. Smucker Company

 Credit Ratings: 


Bought at a Total Cost of 99.27
YTM at TC Then at 3.139%
Current Yield at TC = 2.5184% 

3. Eliminations: 

 A. Sold 100 BHK at $12.74-Used Commission Free Trade: 
Quote: BlackRock Core Bond Trust (BHK)

 Closing Price Last Friday: BHK $12.62 -$0.09 -0.71% 

 Profit Snapshot = +$63

Item # 1.A. Bought 100 BHK at $12.11 (12/12/18 Post)(contains links to prior buy and sell discussions)

 BHK Trading Profits = $381.68

 After the most recent bond rally, I thought that I needed to sell something so I chose two recently purchased leveraged bond CEFs-BHK and NBB discussed in Item 5.B. I mentioned selling those CEFs in a recent comment. 

 I am struggling with the risks of  leveraged CEFs with duration risk given the yields compared to safer individual bond purchases. 

 I would emphasize that an open end bond does not promise to pay your principal back on a date certain. Even a term bond fund does not make that commitment.    

 And, there are events which could change the herd's consensus about the future course of interest rates and whether the FED will in fact remain on hold throughout 2019.  

 Data on Date of Purchase (11/20/18):
Closing Market Price: $12.11
Closing Net Asset Value Per Share: $13.43
Discount: -9.83%

 Data on Date of Elimination (1/8/19):
Closing Market Price: $12.67
Closing Net Asset Value Per Share: $ 13.63
Discount: -7.04%
Sourced: BHK BlackRock Core Bond, closed-end fund CEF Connect

I received one monthly dividend. 

 Scroll to General Risk Discussion for Leverage Closed End Bond Funds: Update For Closed End Fund Basket Strategy As Of 8/14/15 - South Gent | Seeking Alpha

Fund Sponsor Website: Core Bond Trust | BHK

Dividend: Monthly at $.065 per share ($.78 annually)

Dividend Yield at $12.11 = 6.441%

 Dividend Yield at $12.74 = 6.12%

 Last Ex Dividend Date: Today 12/12/18 (after purchase)

 B. Sold 40+NBB at $19.84-Used Commission Free Trade: 


Data Date of 30 Share Trade (11/13/18):
Net Asset Value Per Share: $20.75
Market Price Per Share: $19.04
Discount: -8.24%

 Data Date of 10 Share Trade (11/21/18):
Net Asset Value Per Share = $20.73
Market Price = $18.71

 Discount: -9.74%

 Data Date of Elimination (1/8/19): 
Net Asset Value Per Share = $20.83
Market Price: $19.85
Discount: -4.7%

 Sourced: NBB Nuveen Build America Bond- CEF Connect

 Last SEC Filed Shareholder Report: Nuveen Build America Bond Fund for the period ending 6/30/18

Credit Quality: about 87% in A or better

Average Effective Duration: 10.09 years as of 10/31/18

For a bond fund with that duration, the rule of thumb is that a 1% rise in interest rates would cause about a 10% loss in value. Similarly, a 1% decline would result in a 10% rise in value. Get to know your bond fund: Duration | Vanguard 

The primary risk is interest rate risk due to the long duration. A 10% loss in value would wipe out almost two years of dividend payments.

 NBB Trading Gains:  $516.12 (see prior trading gain snapshots at  Item # 1.B

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members. 
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